Volkswagen Gains Profit Thanks to Chinese Luxury Car Buyers
Volkswagen saw a gain on profits, as Chinese demand for luxury cars helped mitigate the giant automaker’s pandemic-caused 1.1% drop in vehicle deliveries.
The company reiterated it expects to post a profit for the full year, saying that their performance "recovered noticeably" in the quarter, as Chinese sales of premium vehicles, in particular Audi and Porsche sportscars grew an impressive 3%. The German automaker also benefited from several cost cuts it underwent earlier this year in an attempt to offset the effects of the COVID-19 pandemic.
"The cost cuts had as much of an impact as the continuing improvements in the situation in key sales markets” VW said.
Volkswagen’s net liquidity improved to 24.8 billion euros, as opposed to 18.7 billion at the end of Q2. Excluding one-time items, the company's Q3 operating profit posted 3.2 billion euros, vs 4.8 billion euros a year earlier. VW commented that the adjusted operating return on sales in its automotive division fell to 5.4% from 7.4% in the year-earlier quarter, but rebounded from minus 5.8% in Q2, overall demonstrating a positive dynamic, given the troubled times.
Additionally, the automaker commented that although its full-year 2020 profit is still expected to be "severely lower" than in 2019, it would still be in "positive territory."
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